We have previously identified a novel 8 bp sequence (UV-responsive element, URE: TGACAACA) present in the regulatory region of polyoma DNA that interacts with protein factors induced in rat fibroblast cells by exposure to UV light. In the present study, we demonstrate through competitive binding assays that this sequence is distinct from the partially homologous AP1 and CRE target sequences. The proteins that bind to the URE appear to have transcriptional activity in UV-exposed rat fibroblasts. In addition, the URE appears to play a role in promoting the replication of polyoma DNA as determined through two different experimental approaches. Together, these findings suggest that the URE is a novel DNA binding element that interacts with proteins involved in the transcription and replication of polyoma sequences.